Author: Michele Braverman

Should You Share Your Estate Planning Details With Loved Ones?

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When you decide to create a comprehensive estate plan, there are many things to consider. One is whether to tell your loved ones about your plan and how much information to share with them. Estate planning can be a complex and sensitive matter, so your choice may depend on your unique relationships with loved ones and your family dynamics. 

Sharing your estate plan with your loved ones can compromise the privacy of your financial and personal information. Some people therefore prefer to keep these matters private, especially when it comes to distributions of significant amounts of money or property. There are both advantages and disadvantages to revealing private information related to your estate plan. You can choose to communicate details relevant to specific individuals or offer a broader explanation to everyone involved.

Advantages of Sharing Your Estate Planning Details

Everyone Knows What to Expect

Estate planning deals with personal, family-specific situations. By discussing estate planning with your family, you can ensure that your loved ones are aware of how you have structured the money and property that may be transferred to them. Discussing matters up front will also give notice regarding who will be in charge if you cannot handle your affairs or when you die. This transparency can reduce confusion and conflict that can lead to disputes, disagreements, and even legal challenges later. Your loved ones will have the advantage of being prepared for what is to come.

Loved Ones Understand Your Wishes

Your estate planning documents, including your will, trust, and other directives, can sometimes be complex and subject to interpretation. When your loved ones know your wishes, there is less room for misinterpretation of your intentions. This is critical, especially in medical emergencies when decisions must be made quickly.

By sharing your intentions, you can explain your perspective and the reasoning behind your decisions, such as why you have chosen certain beneficiaries, trustees, or executors. This personal touch can help your loved ones appreciate the thought you have put into your estate plan.

When communicating your rationale for distributing money and property in a particular way, you can reduce resentment and promote understanding while you still have the opportunity. This can be particularly important if your plan includes provisions that may seem unequal at first glance. If a problem arises, you may be able to find resolutions and compromises in advance.

If you happen to have beneficiaries with special needs or specific financial requirements, sharing your estate plan ensures that your loved ones are aware of their responsibilities in caring for these beneficiaries and following your instructions to provide for them after you pass away.

You also have the chance to convey your values, beliefs, and objectives regarding your estate. This can be particularly important if your estate plan includes charitable contributions, specific bequests, or arrangements that reflect deeply held principles.

Administration Goes Smoothly

When your loved ones are informed about your estate plan in advance, those involved may be more likely to accept your wishes and cooperate during the administration, making the entire process more efficient. They will know who to contact and what to do. Being aware of the details reduces delays related to identifying your property and beneficiaries and allocating responsibilities. Your chosen decision-makers will already know their roles, which will minimize uncertainty and allow them to step in without hesitation when needed.

Your loved ones will also have contact information for professionals, such as estate attorneys, financial advisors, and accountants, who may need to be involved.

Loved Ones Can Ask Questions

When your loved ones know that you are willing to discuss your estate plan, it can create an environment of openness and trust, which extends beyond estate planning matters. Your loved ones may have questions or concerns, and this is the best time to address them. Together, you can work to find solutions or compromises that align with your wishes and address their needs and expectations for the best possible outcome.

You also have an opportunity to educate your family members about your financial and other estate matters. This knowledge can empower them to be better-prepared for their own financial futures and estate planning decisions. This can offer an additional layer of protection, knowing that your loved ones are proactively protecting themselves and their loved ones as well.

It is also possible that during your conversation with your loved ones, you might realize that important details or beneficiaries were inadvertently left out of your estate plan. Sharing your plan allows you to address any oversights and make necessary adjustments now.

Disadvantages to Sharing Your Estate Planning Goals 

Estate Plans Are Not Set in Stone 

In most circumstances, you have the legal right to change or update estate planning documents such as your will, trust, or beneficiary designations whenever you like, so long as you are mentally capable of doing so. Over time, your financial situation, family structure, or personal goals may change, prompting adjustments to your estate plan. Sharing your plan with loved ones today might create expectations, leading to confusion if you make changes later that affect their inheritance or role in handling your affairs. When loved ones anticipate different outcomes, it can result in temporary disputes or permanently strained relationships.

If you choose to discuss your current estate plan and make changes in the future, ensure the appropriate people are updated of the changes. Loved ones who are unaware can be caught off guard, creating conflicts during the administration phase.

Emotions and Disappointments

Sharing your estate plan may lead to disappointment among your loved ones. When a loved one is upset about the way you have structured your plan, their unhappiness can create emotional strain between you.

In some cases, sharing an estate plan can bring unresolved issues to the surface. When family dynamics are complex or strained, it can exacerbate the situation. Loved ones may have differing opinions about your choices, and these conflicts require difficult conversations to understand their concerns and work toward resolutions. This can be emotionally draining and time-consuming.

Knowing that your loved ones are upset can also disrupt healthy communication. They may be hesitant to express their concerns or objections, fearing that it could lead to further problems. This can also hinder your estate planning decisions. If this happens, you can work with a qualified estate planning attorney or mediator to help guide productive discussions among your loved ones.

Manipulation Tactics 

Your loved ones may express their opinions or desires regarding your estate plan and try to pressure you to make changes that you may not necessarily agree with. While it might be important to you that you consider their input, it can be tough to balance their wishes with your own, especially if you have specific reasons for your chosen plan.

They may use guilt, emotional appeals, or even threaten to cut ties with you if you do not modify your estate plan for them. You may feel significant pressure, particularly if you have a close or dependent relationship with the person trying to influence your decisions.

Attempts to manipulate your estate planning decisions can challenge your autonomy and the principles behind your estate planning goals. Your estate plan should reflect your own values and wishes, and you should make decisions based on what you believe is fair. Stand firm in your decisions and maintain the integrity of your estate plan.

Boundaries must be set with your loved ones to protect your own wishes and well-being. If you are influenced by emotional manipulation, it can lead to regrets and raise complex legal and ethical issues with the validity of your legal documents. It may be necessary to consult with an attorney or mediator to determine the best course of action.

Doing What Is Best for You and Your Loved Ones

Sharing your estate planning details with loved ones can offer several advantages, such as transparency and a smoother transition when you die or are unable to manage your own affairs. However, there are potential downsides, including possible disagreements between family members and pressure to change your plan. The decision to share your estate plan should be made carefully, taking into account your specific objectives and family dynamics. 

We can help ensure that your plan aligns with your goals and discuss with you the potential consequences of sharing your plan details with loved ones. Contact our estate planning attorneys today.

Why You Might Have an Estate Tax Issue Soon

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The Countdown Begins: Will We Keep the $10 Million Exemption?

The year 2026 is quickly approaching, bringing substantial changes that may affect your estate tax situation. The Tax Cuts and Jobs Act (TCJA) in 2017 significantly increased the federal estate tax exemption to $10 million adjusted for inflation. This is the amount you can gift or leave to your loved ones at your death without incurring a gift or estate tax liability. Any portion of the exemption used during lifetime reduces the total exemption amount available at death for estate tax purposes.

However, the countdown has begun for the potential sunset of this generous exemption by the end of 2025. Adjusting for inflation, the Congressional Budget Office estimates the new exemption amount will be $6.4 million in 2026. There are strong arguments for and against the changes in legislation. Whether the current exemption amount remains or is reduced to roughly $6.4 million, valuable insights from professional advisors can prepare you for either scenario. What is not taxable today might be taxable tomorrow.

History of the Estate Tax Exemption

The federal estate tax was first enacted in 1916 to generate revenue for the government. Over the years, it has undergone various changes in exemption limits and rates.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) gradually increased the estate tax exemption and reduced the tax rate until it reached zero in 2010. However, the estate tax was set to return to the 2001 amounts for deaths occurring in 2011 unless further legislative action was taken. In 2011, the estate tax exemption was reinstated at $5.0 million.

In 2017, the TCJA doubled the estate tax exemption from $5.49 million to nearly $11 million to stimulate economic growth and create jobs. The exemption continues to adjust for inflation, offering individuals an unprecedented opportunity to pass on substantial wealth free from federal estate tax.

The TCJA’s Sunset Provision

A sunset provision was embedded within the TCJA to limit how long the higher estate tax exemption could continue. Without legislative intervention, it will be cut in half to $5 million adjusted for inflation in 2026, creating a potential estate planning crisis for people with considerable estates on December 31, 2025. Adjusting for inflation, the Congressional Budget Office estimates the exemption amount will be $6.4 million in 2026.

If We Keep the Current Estate Tax Exemption 

Maintaining or increasing the already high estate tax exemption amount could be seen as a move that benefits the wealthy, broadening the tax burden for others. It can also be seen as maintaining the status quo. And the current law ensures that most people will not be subject to federal estate taxes.

A higher estate tax exemption was expected to foster economic growth and capital investment by allowing wealthier individuals and families to reinvest in businesses and job creation. Yet the federal government relies on estate tax revenue to fund various programs and therefore would not want to reduce a lucrative revenue source. Without the estate tax, other revenue sources would have to foot the bill for these programs and potentially face cuts in the benefits and services provided.

For the estate tax exclusion to remain at the higher amount beyond 2025, Congress will need to take action.

Why the Estate Tax Exemption May Revert Back

The TCJA was part of a short-term tax cut package. Lawmakers had to make room in the budget for the tax cuts introduced by the legislation. They did this by temporarily increasing the estate tax exemption. 

Reverting to a lower exemption amount is believed to generate more revenue by increasing the number of people who pay the tax and increasing estate tax exposure to those with net wealth above the current exemption amount. Estate tax revenues are projected to increase sharply after 2025, when the exemption amount is scheduled to drop. From 2021–2031, the combined estate and gift tax revenues are projected to total $372 billion. 

Preparing for Potential Estate Tax Changes

As we move into 2024, it is crucial to review estate planning goals and strategies that may be affected by potential changes in the federal estate tax exemption law. By working together with your other trusted advisors, we can reevaluate your current estate plan, investments, and property to ensure that you are protected and your financial legacy is preserved. 

The Passing of Senator Dianne Feinstein: Estate Plan Lessons for Blended Families

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Dianne Feinstein, the longest-serving female United States senator in history, passed away in September at the age of 90. First elected to the Senate in 1992, Feinstein leaves behind a political legacy that spanned nearly 31 years. She also leaves behind an estate that is thought to be worth tens of millions of dollars. 

Although a large amount of her wealth came from her marriage to the late billionaire financier Richard C. Blum, Senator Feinstein was also successful in her own right. During their marriage, Feinstein and Blum established a marital trust that is now the subject of a fierce legal battle between Feinstein’s daughter and Blum’s three daughters. 

A judge has ordered the dispute to be resolved in private mediation. While this could keep the final resolution outside public view, the legal drama offers lessons illustrating the need for careful estate planning in blended families. 

Feinstein’s Assets and Estimated Worth

One of the Senate’s wealthiest members, Feinstein had a personal net worth that is estimated at around $70 million. A financial disclosure form filed in May showed that she owned millions in a blind trust, several large bank accounts, and a multimillion-dollar condo in Hawaii. She also owned a mansion in Washington, DC, worth more than $7 million and a private jet that averages more than $61 million if purchased used.. 

Marital Trust and Legal Dispute

Feinstein and Blum married in 1980 and lived together in California, a community property state, until Richard’s death in 2022. Feinstein had one daughter, Katherine, with a previous husband. Blum had three daughters from a prior marriage. 

As the only daughter of Senator Feinstein, Katherine is set to inherit all of her mother’s personal wealth. She also stands to benefit from one-quarter of the estate left by Feinstein and Blum. But how much of that Katherine receives may depend on the outcome of a messy estate dispute. 

Upon Blum’s death, the trustees were required to fund assets into a marital trust to provide for Feinstein during her lifetime. The marital trust would be for the benefit of Dianne until her death, at which point Blum’s daughters would receive the remaining money and property. 

Three lawsuits were filed prior to Dianne’s death, with Katherine serving as agent under a power of attorney. Even after Dianne’s death, the lawsuits continue. They contain allegations of elder abuse, failure to properly fund the marital trust, and failure to reimburse Senator Feinstein for her medical expenses. One of the specific allegations is that the Stinson Beach home should have been sold but was instead used by Blum’s daughters at Feinstein’s expense. 

The lawsuits could be put on hold temporarily while Feinstein’s estate is probated. Katherine, however, should be able to continue her claims, possibly in a new role as executor of Feinstein’s estate. Shortly before the Senator’s death, a California judge ordered the lawsuits to be settled through mediation. 

Estate Planning Takeaways from the Feinstein-Blum Family Feud

Blended families, or stepfamilies, are increasingly becoming the norm. Around half of US families are now remarried or recoupled. 

While any family can succumb to infighting over inheritances, blended families may be more prone to disputes, especially when one spouse dies and the surviving spouse and children have differences of opinion. Significant assets, like those in the Feinstein-Blum estates, can further raise the stakes among heirs. 

The Feinstein-Blum estate plan is what estate planning attorneys characterize as a “yours, mine, and ours” plan, which deals with respective children differently and is common in blended families. However, careful planning is needed to prevent conflicts of interest in this type of arrangement. 

The trust at the center of the Feinstein legal dispute, for example, was set up so that, after Blum’s death, Feinstein received trust income during her lifetime, and remaining assets went to Blum’s daughters after her death. This created competing interests between Dianne, who needed money from the trust to pay for current expenses, and the Blum daughters, who had a motivation to preserve more trust assets for themselves. Leaving assets outright to Dianne, or to a trust where the remainder went to Katherine, while leaving other assets to Blum’s children, could have prevented this situation. 

In every family, blended or not, it is important to be as clear as possible about the terms of distributions. Here are a few other estate planning lessons from the Feinstein lawsuits: 

  • Be careful about naming trustees. If even some of the lawsuit allegations are true, it would mean that the trustees breached their fiduciary duties and that Blum may have made poor trustee choices. Trustees have a lot of power and should be chosen accordingly. Naming former business associates as trustees when Blum had a wife and stepdaughter might have raised questions about objectivity. 
  • The importance of communication. If heirs have no idea what to expect from an estate plan, they could be taken by surprise and be more likely to challenge the administration in court. Consider informing children, spouses, and parents about the structure of your estate plan to prevent any unexpected outcomes that might increase the chances of litigation. People could have strong feelings about certain assets. It is better that they voice them up front and make appropriate arrangements. 
  • Distribute trust assets promptly. Perceived delays in distributing trust assets appear to have deepened beneficiary suspicions about trustee management in this case. The trustee should administer the trust as expeditiously as possible after the death of the trustmaker. Legitimate delays can happen, and if they do, transparency and communication with beneficiaries may stave off a lawsuit. 

Protect Your Legacy and Loved Ones

Trust and estate litigation only makes things worse for grieving families. It can make a private family situation public—which undermines a major benefit of placing assets in trusts—drain away estate assets in legal costs, and irreparably damage relationships. 

Whether you have a blended family or a traditional family, careful estate planning can help prevent issues similar to those raised in the Feinstein-Blum matter. A thorough estate plan that includes provisions such as a statement of intent that explicitly describes goals for trust assets can reduce the chance of tensions between beneficiaries and ensure that your legacy is honored in the way you intend. 

For trust planning, administration, and litigation assistance, please contact our office. 

7 Things You Need to Do Now to Protect Your Beloved Pets

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Pets sometimes outlive their owners. If you suffer an accident or illness, it could leave your cat, dog, horse, iguana, or any other pet without a caregiver, which, without proper planning, could result in your beloved pet being sent to an animal rescue or shelter that is not of your choosing. Take a few steps to protect your beloved pet’s future and ensure they are always cared for, no matter what happens. 

  1. Carefully Choose a Pet Caregiver

Talk to more than one trusted person until you find someone willing to physically care for your pet if something happens to you. If you have more than one candidate, select one as your backup in case circumstances change—a caregiver can move, change their mind, or pass away. Caregivers must have the right environment to receive your pet and accommodate their daily needs. 

  1. Create a List of Emergency Contacts

Just like people, pets likely have professionals that should be called in an emergency. This can include their primary veterinarian and any specialist they may be seeing. You may also want to include the contact information for any boarding facilities you have used in the past or petsitters that come to your home when you cannot take your pet with you.

  1. Create a List of Your Pet’s Medications

Like people, some animals need medications to cure a temporary illness or supplements to manage a chronic condition. It is important that you have a list of these medications and times when they are administered to make sure that whoever is caring for your pet is prepared to administer them.

  1. Create a Budget for Your Pet’s Needs 

Your checklist should include monthly or annual expenses for your pet, including the following:

  • Regular pet food purchases 
  • Treats 
  • Recommended supplements or vitamins 
  • Routine veterinary checkups and vaccinations
  • Preventive medications (flea, tick, heartworm)
  • Dental cleanings and care
  • Prescription medications for chronic conditions or illnesses
  • Haircuts or professional grooming services
  • Litter, litter boxes, waste bags
  • Toys and enrichment items
  • Pet insurance premiums
  • Boarding
  • Training or obedience classes
  • Travel expenses
  • Licensing

Developing this budget will help you estimate costs that a caregiver may have to shoulder or allow you to set aside an appropriate amount of money in your estate plan (either outright to the caretaker or in a pet trust) to cover expenses for your pet’s expected lifetime based on age, health, and breed.

  1. Research Local Shelters

Although you do not want your pet to end up in a shelter if something happens to you, it is important that you plan for all contingencies. By researching local shelters and pet rescues, you can take control of your pet’s future by knowing which one would be acceptable in the event your family or friends cannot take your pet. This is a decision that we can document in your estate plan so that your trusted decision-makers know your wishes.

  1. Contact an Estate Planning Attorney

Armed with a detailed list of expenses and critical information, you will be prepared to share it with potential pet caregivers if you experience a medical emergency and can no longer care for your pet. The best way to do this is with legal documentation. Take this information to an estate planning attorney to create a will or pet trust with a letter of instruction for your pet caregiver. Let your pet caregiver know you have a will naming them the beneficiary of your pet or as the trustee of a funded pet trust to help them with caretaking expenses. Give them the name and contact information of your executor, trustee, and estate planning attorney so they can access a copy of your documents when necessary.

If your pet outlives you, a trusted caretaker will have what they need to ensure a loving environment. By taking the right steps, you will be helping your family members, friends, or local pet welfare agencies provide the best possible care for your pet. If you need to update your existing estate plan or create a new one to provide for your beloved bet, give us a call to schedule an appointment.

Who Will Care for Your Pet?

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If you have a severe illness or accident or pass away, who will you trust to look after your pet? There are many ways to ensure your pet continues to have a loving home.

Guardian of Your Minor Children

If you also have minor children, the nominated guardian of your minor children can be a good first choice to take care of the family pet. The guardian is already taking on the large responsibility of caring for your children, so they may also be willing to take care of your pet. In addition, having the beloved family pet stay with the children may comfort them during a difficult time in their lives. It is important that you discuss this with your nominated guardian to ensure that they are willing to undertake the additional responsibility.

Family or Friends

When selecting a caregiver for your pet, most people look to a trusted family member or friend who may be willing to care for them. This person has probably spent time with your pet and already knows their typical routines and behaviors, making them more comfortable taking on the responsibility. This choice may also provide your pet with a familiar environment. However, taking on a new furry family member is a big responsibility that requires some considerations:

  • Does their lifestyle, home, and comfort with pets make them a good fit for caregiving? 
  • Do they already have other pets? If yes, do they get along with each other?
  • Do they understand the expectations and level of care that the pet requires? 
  • Are there specific instructions or preferences they may not be able to accommodate?
  • Can they afford the financial responsibility of supporting a pet?

Animal Welfare Organizations

In some instances, animal welfare organizations such as shelters, rescue groups, sanctuaries, or foundations can take your pet and find a suitable home. Look for reputable organizations in the area and visit them to assess their cleanliness, staff interactions with animals, and overall environment. The organization must provide a safe and comfortable space while locating a loving permanent home. You should also consider whether this organization euthanizes pets that are not adopted and whether that plays into your choice of organization. Creating a comprehensive profile of your pet, including their medical history, behavior, preferences, and any special needs, with photographs and videos of the pet, could make the adoption process easier for the organization.

Executor’s or Trustee’s Choice

Depending on your situation, you may feel more comfortable with giving the person who winds down your affairs (the executor or trustee) the authority to choose the most suitable home for your pet. Because things can change unexpectedly, providing this level of flexibility can help ensure that your pet goes to a suitable, loving home, even if it is not a home that you initially considered.

Make Your Wishes Known in Your Estate Plan

By proactively planning, you can make financial and care arrangements for your pet’s care well in advance, making the transition easier on everyone involved. 

Once everything is clearly documented for your pet’s care in either a will or trust, you must keep your legal documents and any other pertinent information easily accessible to the designated caretaker and ensure it is kept up to date. Let family members, executors, or trustees know the location of any necessary documentation to care for your pet.

Make sure you review your estate plan annually for any changes in your circumstances, your pet’s health, behavior, routines, or preferences. We are available to help you if you are having trouble selecting the right pet caretaker or want to discuss the best way to protect your pet. Give us a call to schedule a time to discuss ways we can protect your beloved pet.

How You Can Show Your Four-Legged Pals Some Love

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Ways to Provide Money to Care for Your Beloved Pet

As of 2023, 66 percent of US households own a pet. A Forbes Advisor survey of more than 5,000 dog owners found that 41 percent of dog owners spend between $500 and $1,999 a year on their dogs and 8 percent spend more than $2,000 annually. In addition to the annual cost of care, there is always the potential for emergency veterinary care, which can be costly. As a pet owner, you may have concerns about what would happen to your pet if you die or were unable to make decisions or care for your pet. There are several options to ensure that money will be available so your beloved furry family member will continue to receive the same level of care and support that you have always given them.

You will want to evaluate the weekly, monthly, and annual costs associated with your pet’s needs. This process will help you determine a specific amount required to cover your pet’s anticipated lifetime expenses.

Lump Sum to the Caregiver

One option to financially provide for your pet is to give a lump sum to the person you choose to care for your pet at your death. This option is the easiest to carry out and does not involve any ongoing administration or oversight. However, because the money goes directly to the caregiver, there will be no one monitoring the use of the funds. You must trust that the caregiver will use the funds for the pet’s benefit.

Pet Trust With the Caretaker as the Trustee 

This approach to planning for a pet is a little more complicated than just giving money to the caregiver. In this scenario, money would be set aside in a trust specifically to care for your pet. There may be administrative requirements that the caretaker, as trustee, must do, such as submitting an accounting of the trust’s income and expenses to a specified person. Despite these requirements, this approach does provide some flexibility because the caregiver and the trustee are the same person, meaning that a third party does not have to be consulted before expenses are paid or the caregiver is reimbursed for out-of-pocket costs. It is important to note that with one person serving in both roles, there is still a risk that funds may not be spent appropriately on the pet without oversight by a third party. 

Pet Trust With Separate Parties Serving as Caretaker and Trustee

The final option provides the maximum protection for the money set aside for the pet. The pet trust will contain funds to care for the pet, but the caretaker will need to work with the trustee to gain access to the funds in the trust. The trustee can ensure that the money is being used for the pet. This may be a wise option if you have animals that cost a lot to care for such as horses or exotic animals, because the amount necessary to care for them could be more than you feel comfortable handing over to someone without any oversight.

Make Sure Your Plan Stays Up-to-Date 

By proactively planning for your pets, you can ensure that they are cared for and supported if you cannot do so yourself. If you already have an estate plan that provides for your pet, an annual review of your estate planning documents can address changes in circumstances, such as acquiring additional pets, an increase in your pet’s needs, the designated caregiver’s situation, or your finances.

Helping Your Clients Create a Pet Budget

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Pets sometimes outlive their owners. A client’s accident or illness can leave their pet without a caregiver, which, without the proper planning, can result in the pet being sent to an animal rescue or shelter. Compiling a list of common expenses is the first step in protecting a beloved pet’s future. You can assist your client in determining the right amount of funds to set aside for their pet’s continued living arrangements.

Create a Checklist 

There are many online resources to help develop a list of pet expenses. Pet owners should consider the following types of expenses.

Nutrition 

This is a primary expense for any pet, but larger animals will incur higher food costs. Include the following when calculating how much to budget for:

  • Regular pet food purchases 
  • Treats 
  • Recommended supplements or vitamins 

Veterinary Care 

Healthcare keeps pets feeling their best and able to provide joy, entertainment, and companionship. Routine care can help prevent medical emergencies, but your client should still budget for the unexpected, including the following:

  • Routine check-ups and vaccinations
  • Preventive medications (flea, tick, heartworm)
  • Emergency vet visits
  • Dental cleanings and care
  • Spaying or neutering

Medications 

Medication is sometimes necessary for illnesses, injuries, and aging. Some animals and breeds of animals are known for having certain health conditions during their lifetime. Most medications are based on weight, so larger pets may also have higher medication expenses. Common medications or preventative treatments include:

  • Prescription medications for chronic conditions or illnesses
  • Flea, tick, and worming treatments
  • Pain relief or anti-inflammatory drugs

Grooming and Hygiene 

Some animals only need occasional grooming to supplement self-grooming techniques, while others require extensive care to maintain their coat, teeth, or nails. It may be a matter of preference and appearance. If you have a show animal that is regularly entered in events or contests, the costs can be significant:

  • Shampoo, conditioner, grooming tools
  • Nail trimming and filing
  • Haircuts or professional grooming services

Pet Insurance 

Insurance helps make certain medical visits affordable when a pet suffers from an unexpected illness or injury. Depending on the type of pet and risks for injury, the cost of insurance can be a few dollars to a few hundred a month for most small animals. Large animals such as horses can have much higher premiums:

  • Monthly or annual premiums for pet insurance coverage
  • Deductibles and copayments for medical expenses

Pet Supplies

Every type of pet needs certain supplies to provide them with a comfortable environment. Again, the size of the pet usually dictates the initial cost of these items, and many items need replacement over time:

  • Bedding or crate
  • Leashes, collars, harnesses
  • Litter, litter boxes, waste bags
  • Toys and enrichment items

Boarding

Due to work schedules and vacations, a pet may need to be boarded, cared for by a petsitter, or attend daycare, for which the following costs must be considered:

  • Boarding fees at a kennel or other boarding facility for vacations or trips
  • Petsitting services in the home
  • Daycare for socialization and exercise during the workday

Travel and Transportation

If you travel a lot, smaller pets can travel with you in cars or planes; larger pets require hauling in trucks and trailers:

  • Travel crates or carriers
  • Transportation fees (public transportation services)

Identification

To comply with local laws and ensure you can track and identify your animal, different types of identification can be purchased or may be required:

  • Microchipping
  • Pet tags and collars
  • Licensing fees

After a budget is created, your client will have a detailed list of expenses to share with potential pet caregivers and an estimate for how much future pet-related expenses may be. This estimate can act as the basis to determine how much money should be set aside for the pet’s care and where that amount of money will come from in the event of the client’s death.

Next Step

Once your client has a budget in place, the next step is to meet with their planning team (financial advisor, insurance agent, tax preparer, and estate planning attorney) to put a plan in place that protects their pet and provides the funds necessary to care for them in the event the client passes away before their beloved pet. If you are interested in learning more about pet planning and the role you can play, please give us a call.

Options for Your Client’s Pet Caregiver 

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If your client has a severe illness or accident or passes away, who will look after their pet? There are many ways to ensure that a client’s pet continues to have a loving home, and the process begins with finding the right caregiver.

Guardian of Their Minor Children

If your clients also have minor children, the nominated guardian of their minor children can be a good first choice to take care of the family pet. The guardian is already taking on the large responsibility of caring for the client’s children, so they may also be willing to take care of the client’s pet. In addition, having the beloved family pet stay with the children may comfort them during a difficult time in their lives. It is important that your client discuss this with their nominated guardian to ensure that they are willing to undertake the additional responsibility.

Family or Friends

When selecting a caregiver for their pet, most people look to a trusted family member or friend. This person has probably spent time with the pet and knows their typical routines and behaviors, making them more comfortable taking on the responsibility. This choice may also provide a pet with a familiar environment. However, caring for a pet is a big responsibility that requires clients to consider the following in a potential caregiver:

  • Does this person’s lifestyle, home, and comfort level with pets make them a good fit for caregiving? 
  • Do they already have other pets? If yes, do the pets get along with each other?
  • Do they understand the expectations and level of care that the pet requires? 
  • Are there specific instructions or preferences they may not be able to accommodate?
  • Can they afford the financial responsibility of supporting a pet?

Animal Welfare Organizations

Sometimes, family and friends are not available to help. Animal welfare organizations such as shelters, rescue groups, sanctuaries, or foundations can take your client’s pet and find a suitable home. They should locate reputable organizations in the area and visit them to assess their cleanliness, staff interactions with animals, and overall environment. Pet owners should select an organization they feel can provide a safe and comfortable space for their pet while waiting to be placed in a loving permanent home. Your client might also consider whether the organization mandates euthanasia if the pet is not adoptable. Creating a comprehensive profile of the pet, including their medical history, behavior, preferences, and any special needs, with photographs and videos, could make the adoption process easier for the organization.

Executor’s or Trustee’s Choice

Depending on the client’s situation, the client may feel more comfortable giving the person who winds down their affairs (the executor or trustee) the authority to choose the most suitable home for their pet animals. Because things can change unexpectedly, providing this level of flexibility can help ensure that the client’s pet goes to a suitable, loving home, even if it is not a home that was initially considered by the client.

Memorialize the Client’s Wishes in Their Estate Plan

Your client must memorialize the caretaker of their pets in their estate plan, typically in a will or trust, and keep this information easily accessible to the designated caretaker. They must also let family members, executors, or trustees know the location of any necessary documentation to care for the pet.

Make sure the client reviews their estate planning documents annually for any changes in your client’s circumstances, their pet’s health, behavior, routines, or preferences. We are available to meet with your clients if they are having trouble selecting the right pet caretaker or want to discuss the best way to protect their pet. Give us a call to schedule a time to discuss ways we can partner together to serve clients with pets.

How Clients Can Show Their Four-Legged Pals Some Love

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Help Your Clients Provide Financial Support for Their Pet in Uncertain Times

As of 2023, 66 percent of US households own a pet. A Forbes Advisor survey of more than 5,000 dog owners found that 41 percent of dog owners spend between $500 and $1,999 a year on their dogs and 8 percent spend more than $2,000 annually. In addition to the annual cost of care, there is always the potential for emergency veterinary care, which can be costly. Your clients are likely concerned about what will happen to their pets if they die or are unable to make decisions or care for their pets. Several options are available to your clients to ensure that funds are available so their beloved furry family members continue to receive the same level of care and support they have always received.

Pet owners should evaluate the weekly, monthly, and annual costs associated with their pet’s needs and create a budget. This budget can help clients determine a specific amount of money to be put aside to cover the pet’s anticipated lifetime expenses. There are a few options available to structure the money set aside for the care of a client’s pets.

Lump Sum to the Caregiver

One option to financially provide for a pet is for the client to give a lump sum to the person they choose to care for the pet at their death. This option is the easiest to carry out and does not involve any ongoing oversight or administration costs. However, because the money goes directly to the caregiver, no one will monitor the use of the funds. The client must trust that the funds will be used for the pet’s benefit and must be okay with simply trusting their chosen caregiver.

Pet Trust With the Caretaker as the Trustee 

This approach to planning for a pet is a little more complicated than just handing money to the caregiver. In this scenario, money would be set aside in a trust specifically to care for the pet. There may be administrative requirements that the caretaker, as trustee, must do, such as submitting an accounting of the trust’s income and expenses to a specified person under the trust. Despite these requirements, this approach does have some flexibility because the caregiver and the trustee are the same person, meaning that a third party does not need to be consulted before expenses are paid or the caregiver is reimbursed for out-of-pocket costs. It is important to note that with one person serving in both roles, there is still a risk that funds may not be spent appropriately on the pet without oversight by a third party. 

Pet Trust With Separate Parties Serving as Caretaker and Trustee

The final option provides the maximum protection for the money set aside for the pet. The pet trust will contain funds to care for the pet, but the caretaker will need to work with a separate trustee to gain access to the funds in the trust. The trustee can ensure that the money is being used for the pet. This may be a wise option for clients who have animals that cost a lot to care for such as horses or exotic animals, because the amount necessary to care for them could be more than the client feels comfortable handing over to someone without any oversight.

Keep the Plan Up-to-Date

By proactively planning for their pets, pet owners can ensure that their pet is cared for and supported if they are unable to do so themselves due to incapacity or death. If clients already have an estate plan that provides for their pets, encourage them to schedule an annual review to address any changes in circumstances, such as additional pets, increasing pet needs, the designated caregiver’s situation, or the client’s finances.

As an experienced estate planning attorney, we can help your clients create the appropriate legal documents for the care of their pet within the applicable laws and regulations of their state. Pet owners deserve peace of mind knowing that their pets will transition to a new caregiver smoothly, with as little disruption in care as possible. Taking care of a loved one’s future, including pets, is priceless. If you are interested in collaborating on pet planning for your clients or would like to discuss pet planning further, give us a call.

An Estate Plan Is a Great Way for Clients to Give Thanks

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Your Clients’ Legacies: How Do They Want to Be Remembered? 

As trusted advisors, we often discuss with our clients all aspects of the future, whether it be their financial future, the future support of their loved ones, or what the future will look like when they are no longer a part of it. Epitaph Day is an opportunity to center your discussion on how your clients would like to be remembered. 

As Thomas Campbell, physicist and the author of My Big TOE, once said, “To live in the hearts we leave behind is not to die.” When we lose a loved one, we often have memories of special events and occasions, support they provided us, or specific qualities of that person we will never forget. An epitaph, by definition, is a brief phrase or sentence expressing a sentiment, often inscribed on a tombstone. Epitaph Day is a symbolic event dedicated to the contemplation and creation of our desired epitaphs. It is a gentle and meaningful reminder of the impermanent nature of life and the importance of estate planning. 

An Estate Plan Can Help Them Be Remembered

In the rush and routine of daily life, it can be easy to postpone essential matters like estate planning. Although Epitaph Day has recently passed, now is a great opportunity for clients to pause and consider the importance of ensuring that their wishes, the things they own, and their legacies are handled according to their preferences after their departure from this world. Your clients may be surprised to learn more about the ways that they can incorporate their own desired epitaph into the planning process. 

A Trust Can Help Your Clients Guide Their Loved Ones

While it is true that a trust is a valuable estate planning tool, it is much more than that. A trust can memorialize your client’s values and aspirations for their loved ones. By incorporating provisions that incentivize beneficiaries to pursue an education, hone a new craft, contribute to the community through volunteering, or even embark on entrepreneurial ventures, your clients can craft a legacy of encouragement, motivation, and support. Their trust can become a continuation of their presence, guiding their beneficiaries in ways that align with their wishes and vision for their future.

A Trust Keeps Your Client Part of Memorable Experiences 

For those clients who cherish experiences and the creation of lasting memories, it can be invaluable to incorporate clauses within their trust that allocate money specifically for ventures like traveling, exploring new places, or even family reunions and celebrations of important events. These provisions not only facilitate experiences but also foster a deeper connection, ensuring that their family bonds remain strong even in their absence.

A Trust Can Provide Monetary Support 

An estate plan is a powerful tool that can reflect your clients’ dedication and commitment to the well-being and success of their loved ones. For those who have provided financial support to loved ones in their lifetime, their estate plan offers them an opportunity to define and detail the nature and extent of their continued monetary support. Through meticulous planning, they can be remembered not just for the wealth they have accumulated but also for the love, care, and foresight indicated by the provisions incorporated in their plan. 

Now Is the Perfect Time for Clients to Start Planning

Epitaph Day creates an opportunity for clients to proactively engage in the estate planning process and provide them with both peace of mind as well as clarity and ease for their loved ones in the future. This can help ensure that your clients’ desires, whether about distribution of their hard-earned money and property, funeral arrangements, or messages to their loved ones, are clearly articulated and legally secure. 

Let us help your clients embark on the crucial journey of estate planning, ensuring that their legacy is honored and that their loved ones are spared unnecessary difficulties in honoring your clients’ lives and wishes for the future. 

The Real Story Behind Trust Fund Kids 

When we hear the phrase “trust fund kid,” words like “entitled,” “privileged,” and “financially irresponsible” might come to mind. But another word we should associate with “trust fund kid” is “protected.” 

What Is a Trust Fund Kid?

According to a Forbes article published in 2021 about trust fund kids, three of the most common misconceptions are that trust fund kids all come from ridiculously rich families, they have it easy, and everyone who has serious money must have a trust fund. While these misconceptions may apply to some trust fund kids, it does not apply to the majority. The reality is that a trust fund kid does not necessarily live a life filled with lavish trips, designer clothes, and expensive cars— they are simply a young beneficiary of a trust. When most people hear the word “trust,” they envision an endless pot of money freely accessible to the beneficiary. Trusts are created for a variety of reasons, however, and are not just planning tools that benefit the ultrawealthy. 

Why Do Trust Fund Kids Have Such a Bad Reputation? 

This bad reputation stems from a fundamental misunderstanding of trusts and the benefits they can provide. A trust often indicates that an individual has taken the time to intentionally plan for their children’s or loved one’s future, and instead of deciding to leave money to these individuals outright with no protections or conditions, they have decided to protect those funds. Whether the amount held in trust is millions of dollars or far less, trusts can be structured to ensure that the money lasts, is used for specific purposes, or is even held for the future benefit of children or loved ones. Added benefits of utilizing a trust are privacy, as trusts are not filed with courts and therefore are not subject to the public eye, and avoiding the probate process, which in some cases can be costly and time-consuming. 

Preventing the Negative Consequences

Limit Control

After enlightening your clients about the real story behind trust fund kids, they may want to learn more about the positive ways a trust could benefit their own children or loved ones. To avoid the negative stereotypes surrounding trust fund kids, your clients will want to consider how much control they want to give the beneficiary over their own trust. Granting too much control could lead to uncontrolled spending or unreasonable purchases. 

Make a Beneficiary Earn Their Inheritance

Clients may want to avoid the perception that their children or loved ones have it easy and should therefore consider building in provisions that will require their children or loved ones to “earn” portions of their trust. This structure can incentivize their children or loved ones to achieve more by reaching certain milestones such as completing postsecondary education, finishing trade school, serving in the military, or starting a business. Clients can elect to have the trustee purchase certain assets, such as a home, in the name of the trust to ensure that the assets are provided to the beneficiary, while the trustee is responsible for ensuring that it is properly maintained and not sold on a whim. 

Consider Loans Instead of Outright Gifts

You may encounter clients who have worked hard to build their wealth and want to leave protected funds that can benefit their children or loved ones in a different way. There are many wealthy individuals who do not want to leave money to their children or loved ones because they believe it may disincentivize them to pave their own way. As it is, the majority of young adults do not have the ability to obtain financing with favorable terms on their own. For your clients who want to provide a more conservative form of support, they can allow their trust to provide favorable loans to beneficiaries that they will have to pay back with interest, allowing the principal to grow for future generations. 

We Can Help Your Clients Avoid the Downsides of a Trust Fund Kid

Although being a trust fund kid often has negative connotations, your clients will likely want to make their own children or loved ones trust fund kids if they are educated about the positive aspects. We can help further educate your clients about how a trust can benefit them, protect their children or loved ones, and support their children or loved ones in the future. 

This Thanksgiving We Are Thankful for Your Collaboration

It is no secret that having a solid network of quality professionals allows us to address more than just one of our clients’ concerns. It takes a team to plan for life’s foreseen and unforeseen events. Working with quality professionals like you enables us to ensure that our clients are receiving the best possible comprehensive plan and that it is done the right way. 

Our clients can feel secure knowing that all facets of their future are being considered when we collectively strategize the best structures and tools to adequately address their finances, businesses, and tax considerations, all while achieving the end goal of promoting family harmony. 

There Are Many Opportunities for Us to Work Together

Irrevocable Trusts

Irrevocable trusts provide higher-net-worth clients with a variety of benefits, such as avoidance of estate inclusion and reducing future estate taxes. Consequently, clients will likely require assistance addressing the higher income tax liability and understanding any potential tax implications associated with the trust being the owner of the money and property they have worked so hard for. 

Business Succession Planning

We often encounter business owners and entrepreneurs while creating an estate plan. As part of our process, we often implement strategies on the estate planning side to address business succession and management in the event of death or incapacity. Additionally, we discuss clients’ goals of achieving asset protection for their real property, which may involve us advising them to transfer their property to a business entity. While we can address some aspects of business ownership, our clients benefit from the guidance of an experienced professional who can assist them in determining which business entity type may be the most appropriate, and even further, ensuring that they have the proper formation and operational documents in place once it is established. In addition, clients will likely need to be educated about proper management and any filing requirements associated with entity ownership. 

Liquidity for Minor Beneficiaries

Planning for minor children is often at the top of our clients’ priority list. Trusts are often a great tool to create a plan for minor children in the event of a client’s death. This form of planning involves examining a client’s assets and ensuring that there is an available source of liquidity to fund the trust for the benefit of these children. 

We Are Thankful to Have a Go-To Person 

We are thankful to have you as a part of our incredibly valuable network. We appreciate the contributions you make to ensuring that our mutual clients have a comprehensive plan for the future. Our world is constantly changing, prompting clients to have evolving concerns that need to be addressed by knowledgeable professionals. Having knowledgeable professionals like you allows us to be the go-to person when clients call us looking for guidance. Thank you for being a part of our network, and we look forward to continued opportunities to collaborate to better serve our clients.